#DigitalSkeptic: Bitcoin Becomes Investor Porn

"When I heard about Bitcoin, it sounded like a bunch of kids having fun," said the chairman of the investment committee for the University of Toledo, a $400 million endowment that helps fund the Ohio-based educational institution of roughly 50,000 students and faculty. "But now that it's passing for real money, something significant and ugly has happened."

Collins and I, over coffee in his Rye, N.Y. home, were breaking down how Bitcoin uses open-source, peer-to-peer digital technology, similar to how music and desktop data is often shared, to move money around the globe. We were shaking our heads over recent announcements that sports teams such as the NBA's Sacramento Kings, carmaker Tesla and even law enforcement officials are treating this virtual currency as real currency.

Collins is my kind of currency expert. Over the half-decade we've talked, I have always admired his flesh-and-blood street smarts in growing the hundreds of millions he manages for his Toledo-based alma mater. Collins knows financial technology. Back In the mid-1980's, he was a major player in the Bitcoin of that era: He ran the mortgage-backed securities operation for A.G. Becker Paribas, to gussy it up for a lucrative sale to Merrill Lynch in 1984.

"What Merrill was paying for was the automated trading processes we developed," he explained. "We were some of the first to do that."

Collins has done tens of thousands of deals, touched billions of dollars and can talk smack about everybody from Sandy Weill back when Citibank was nothing more than Commercial Credit Co. to Michael Bloomberg when he just another hack looking for money for his nutty terminal idea. And his investment philosophy is easy for investors to love: "I am all about exactly one thing: stocks," he said. "When money is this cheap, where else can you put capital to find return?"

So how does Collins sum up Bitcoin? One word: terrifying.

"If you're mistaking Bitcoin for real currency, I have a great deal on tulips for you," he said. "Because when the liquidity evaporates for this stuff -- which let's not pretend can't happen in our post-mortgage meltdown world -- flower bulbs are going to be 10 times worth more than any pile of Bitcoins."